Shares of Microsoft are 3% higher in after hours as the company reported strong earnings.

Value investors such as David Einhorn and Bill Nygren have loaded up on shares of Microsoft in 2011. Thus far in 2012, the idea is working well.

Microsoft reported net profit of $6.624 billion, or 78 cents per share, compared with $6.634 billion, or 77 cents per share, in the year-ago quarter. Despite chaos in Europe and fears of a recession, sales rose 5 percent to $20.9 billion, in line with analysts' forecasts, helped by its Office, server software and Xbox businesses.

Furthermore, the reviews on Windows Mobile 8 have been favorable. The mobile unit could also experience double digit revenue growth in 2012. Walt Mossberg reviewed a Nokia phone running on the old Windows operating system. The $50 smart phone might be blockbuster hit in times where consumers are stretched for cash. The phone is even being sold at Walmart for $18.88.

"After a week of testing the Lumia 710, my verdict is that it's a good value for the money, and a good choice for people moving up to their first smartphone, or those looking for an alternative to Android and Apple. It has some notable weaknesses and drawbacks, and it doesn't compare with the iPhone 4S or elite Android models like the Samsung Galaxy S II. But it's a decent phone that gets the most common smartphone tasks done."

Comments

Their absolute earnings number is down, but due to their share buybacks their EPS is up.. This is the definition of a value stock. Huge margin of safety, and the smallest of catalysts will kick the share price through the roof.

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